Malta Taxation of Resident non-Doms: Entities

Dr. Jean-Philippe Chetcuti | 28 Apr 2011

Ccmalta Default

Origins of Malta's Remittance Basis of Taxation

 

Defining "Residence" and "Domicile"

definitions as applicable for entities

15% Remittance Based Taxation

mention the ways of benefiting from Special Tax Status. MRP, GRP, TRP, HQP...

Limitations on Malta' Remittance Basis of Taxation

PR (TRP Rules), LTR (GRP Rules)

Malta Taxation of Remittance of Income

 

Non-Malta Taxation of Remittance of Capital Gains

 

Non-Dom Taxation of Passive Income

 

Domicile and Resident in the Maltese Personal Tax System

Malta owes the origins of its tax system to its historical roots as a UK colony between 1800 and 1964. As a result, our personal tax system is one based on the concept of residence and domicile as the criteria determining the extent of a person's personal taxation in Malta.  In the absence of a definition of “residence” and “domicile” under Maltese law, Malta relies on the meaning assigned to them under UK Common Law. 
Persons born in one country are presumed to be domiciled there unless they can prove a change in residence intended as permanent.  Spouses and under-age children assume the domicile of the husband/father. 
A person is considered tax resident in Malta at law if he is not a temporary resident and has showed an intention to remain permanently or has actually resided in Malta for 183 days.  A permanent residence permit is sufficient evidence of one's tax status in Malta irrespective of the duration of one's residence in Malta.

Remittance basis of taxation
Persons resident but not domiciled in Malta are subject to tax in Malta on a remittance basis.  This means that they are subject to tax in Malta only on foreign income received in Malta and not on foreign source income not remitted to Malta or on capital gains arising outside.
 

Non-Domiciliationss

The Maltese Income Tax Act retained the British notion of the distinction between income and capital gains, taxing only the former and the latter only in specific circumstances. In the absence of a definition of “residence” and “domicile” under Maltese law, Malta relies on the meaning assigned to them under UK Common Law.   Foreigners may take up residence by declaring such intention within 3 months of arrival in Malta, following the requisite formalities, or alternatively by taking up employment in Malta.

Remittance only basis of tax
Non-domiciled foreign holders of a PR permit in Malta are taxable on a remittance basis only on income and not foreign source capital remitted to Malta and on income and capital gains arising in Malta.


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Ms Michelle de Maria

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+356 22056692

Mr Kenneth Camilleri

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